Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead / Commodities / Gold & Silver 2020
In recent issues of Seasonal Insights, my colleague TeaMuratovic and I shared our analysis of global stock markets with you.
Today I want to put a popular precious metal under the magnifying glassfor you: silver.
Silver, often referred to as the "little brother" of gold,has a particularly interesting seasonal pattern I would like to show to you.
Silver's seasonality under the magnifying glass
Take a look at the seasonal chart of silver. In contrast to a standardprice chart, the seasonal chart shows the average pattern of silver in thecourse of a calendar year. For this purpose, an average was calculated from theprice patterns of the past 52 years. The horizontal axis shows the time of theyear, the vertical axis depicts price information.
Silver price in USD per troy ounce, seasonal pattern over the past 52years
Silver starts to rise at the end of June
Source: Seasonax
As the chart illustrates, there are two favorable seasonal phases insilver. The first one begins in mid December (i.e., on the right hand side ofthe chart) and lasts until February (due to the turn of the year on the lefthand side of the chart; arrow to the left).
The second one starts at the end of June and lasts until the end ofSeptember (arrow to the right).
In addition I have highlighted the beginning of this second phase witha circle.
The silver price rose in 31 of 52 cases!
The imminent strong seasonal period in silver begins on 28 June andends on 21 September. A positive performance was recorded in 31 of the 52 casesunder review.
During this phase silver generated an average gain of 4.87 percent,which corresponds to an annualized return of 22.71 percent.
The bar chart below shows the return generated by the silver priceduring this seasonally strong period in every year since 1968. Blue barsindicate years in which gains were achieved, red bars show years in whichlosses were posted.
Silver in USD, return in percent between 28 June and 21 September inevery year since 1968
Gains predominate.
Source: Seasonax
On two occasions the price increase reached even more than 70 percent.A particularly strong advance of 75.15 percent was recorded in 1979. Thelargest loss was posted in 2008. At 23.08 percent it was noticeably smaller.
In short, the imminent strong seasonal phase not only includes anabove-average number of especially strong gains, but also fewer and lesspronounced declines.
What is the situation with gold, platinum and palladium?
Something you may not be aware of: although the price of silver has astrong positive correlation with the gold price, in part its seasonal patterndiffers significantly. The same applies to platinum and palladium. If you wantto examine the precise seasonal patterns of gold and the other precious metals,take a look at www.seasonax.com!
Yours sincerely,
Dimitri Speck
Founder of Seasonax and Head Analyst 90 TageTrader
PS: With the Seasonax event tool you can createyour own event studies!
© 2020 Copyright Dimitri Speck - All Rights Reserved- Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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